REGISTERED BUSINESSES (business number, taxes, import/export)???? ARE YOU LEGAL WITH THE CANADIAN GOV'T?

[skylapcom]

Hello,

I have recently finished registering with the Canada Customs and Revenue Agency (CCRA) for a legal Business Number (BN) including a GST/HST number, an import/export number, and a payroll number. I've been speaking with governing officials and they say if your selling or your business is more than a hobby (if you're a powerseller it is obvious that it is more of than a hobby), you should be registering your company/activities and paying the taxes for them.

This to me is dissapointing since ebay takes enough fees and I have enough things to pay for but I found out they can take my car, my computer, my belongings for back taxes if they found out I was still not registered but still selling. I've been selling for years and they were shocked that I was not registered. They mentioned the trouble I could be in.

Anyways...
I was just wondering about the accounting/tax side of things and how you Canadian sellers manage your accounting and your income tax with the gov't. Since we ship out our items, we are required to have an import/export number. I've been trying to figure it all out and figure I should do one step at a time.

Right now I'm working on the taxation side of things, not the GST/HST yet but the gov't taxes we must pay. How do you keep track of your recieved payments and your expense payments? Does anyone have a system they can show me or maybe even a spreadsheet someone can give me for excel? I've been having a hard time and need an experienced seller to help me out.

If you're still not registered with the gov't, I'm hoping they do not find you and take all your stuff. They found me by the transactions on my credit card and in my bank account. They can find you too :(.

THANKS FOR THE HELP!!
Mark

[your-chic-shopper]

I do not think your going to get a lot of people in this thread tell you how they run thier busines.

[treasure-pot]

If you are running a sizeable legitimate business, drop some coin and go with QuickBooks Pro (CDN ED). It does quite nicely at keeping track of applicable taxes and will even prepare a report for you for paying GST or PST.

It can also generate a very nice invoice which lends even more credibility to your business. When you have to charge people applicable taxes they generally want to see something that reflects that the taxes they pay are going to a legitimate business and then forwarded to the Receiver General rather than someones pocket.

Beyond that, accountants get paid for the type of advice you are asking for and I am reticent to try and take business from their rank and file.

Bill

[mahsauction]

If you are selling enough to be a powerseller, I would highly recommend going to an accountant and get some advice. You don't want to mess with the feds money (taxes), they get touchy about that kind of stuff.

[karensvariety]

My question is simply if I am buying at garage sales, how do I claim the amount I pay as a business expense. I can't ask for receipts. Did you learn anything about this end of it?

[treasure-pot]

You may not get receipts but that should not keep you from keeping records.

When I was buying from yard sales I would keep a supply of pre-printed petty cash vouchers I had prepared with me and record my purchase on it. Keep that info as CCRA can be satisfied provided they see you are making a sincere effort to keep things above board.

They do tend to get a little "owly" when they think someone amy be fudgin' their due.

Bill

[catseye*]

If you use AuctionWorks as an auction manager, they're very exportable to Quickbooks, etc when it comes tax-time.

[skylapcom]

your-chic-shopper, I'm not asking how people run their businesses, I'm just asking for some help or advice from some experienced sellers. This is the Canadian board is it not? Help is greatly appreciated. 😉

Mark

[skylapcom]

Thanks for all the help everyone! I will be talking to an accountant tommorow to figure things out some more. Any information I gain from my meeting will definitely be shared with all of you! I'm very interested in something or a spreadsheet to keep track of payments, etc but it's hard since payments are in USD and CND. I will be checking out Quickbooks for sure, thanks for the title!

Talk to you all soon,
Mark

[treasure-pot]

Quickbooks - CDN ED will allow you to set up receivables in USD and a number of additional currencies if you wish. I'm not sure that the US version does... you know how our neighbours are about touching any other nation's currency...

Bill

[jaymor8]

Boy oh boy...this talk scares me to death!!! I am a PS and I don't make THAT much money. Just thinking of all of this makes me feel that my hobby is no longer a hobby 😕

Jackie...

[treasure-pot]

... and when you go to bed tonite, Jackie, pull the blanket up over your head so the bogeyman won't get you. lol

Unfortunately, at a certain point I guess it stops becoming a hobby and changes to a job. Running your own business means that for a while you are chief cook and bottle-washer and everyone is standing at your door waiting to take a piece of your small income.

Like any job there are the parts that I love and then there are the parts that I'm not so crazy about. Now I just have to get big enough to afford to pay someone else to look after all the parts that I don't enjoy. The book keeping part of the business is a part that I would gladly hand off to someone else.

[can-import]

If you are selling for more than 30000$/year, you must register for taxes. You must charge them and make reports 4 times per year

[mahsauction]

Don't buy the Quickbooks US edition because it doesn't deal with multicurrency. The Canadian edition does. I don't know how I would have organized my Ebay finances without Quickbooks.

[www-labels4less-com]

Simply accounting is a decent program that will help you with many of your tasks.

[your-chic-shopper]

skylapcom

I missread your thread extremly sorry
Todd

[skylapcom]

Todd,

No problem, I was just being funny in my response to you. 😉

Mark

[yjw1]

There is some advantages to regeresting as a small business. If you sell to the US, you can claim all your GST back and charge none. It is like making another 7 points on your sales. Not to mention the expense write off.

A good account will more than pay for themselves.

[ospreylinks]

In reply to vjw1 - you make it sound like when you buy an item and pay GST that it is a cost.....anytime you buy an item to operate your business and are charged GST, you get an applicable input credit.

When you sell the goods to a Canadian, you reclaim the 7% by charging the GST....

If you sell to out of Country, you do not score 7%, because you had to pay the 7% at the time of the purchase of the goods.... it is all revenue neutral.

Do make sure you keep good track of all sales and able to prove goods shipped out of Country if no GST is collected (the onus is on you to prove that you actually shipped the goods out of country, otherwise you are responsible for the GST on the sale).

It is also important to note that the Government can force you to open a trust account to deposit all GST funds collected if they feel that money collected for GST is in peril of being paid to the Government when due....what a nightmare this would be just to manage....

Jeff

[yjw1]

Jeff,
Correct, it is revenue neutral and I did not express my point correctly.
The amount Canadians will bid is obviously going to be effected when they take into consideration the 7% GST added to the total.
US customers do not have to deal with the added expense so they perhaps will bid higher for an item.
Reclaim 7% GST paid and sell that item to the US and it is very likely that you are making an extra 7 points on that sale. One of the reason I hate selling within Canada.

Records...Every sale has an invoices with a US address and a matching shipping invoice. My accountant says...bring on the auditors!